New Jersey State Bar Association Raises a Red Flag

NEW BRUNSWICK: The New Jersey State Bar Association added its voice to the chorus of bar groups around the country opposing a Federal Trade Commission rule that says lawyers must get involved in identity theft prevention.

This week, the association sent letters to the head of the FTC and members of the New Jersey Congressional delegation opposing the proposed rule. The association’s board of trustees protested the measure in a resolution adopted earlier this summer.

“The NJSBA is concerned because the legal profession has suffered in this economic recession. Onerous and unnecessary government regulation makes the practice of law that much more difficult. In addition, the fact that no clear Congressional mandate can be demonstrated calls further into question the propriety of the actions taken by the FTC,” Association Executive Director Angela C. Scheck wrote.

The so-called “Red Flags Rule” requires creditors, including lawyers, to detect early signs of identity theft. The rule is a part of the Fair and Accurate Credit Transactions (FACT) Act, which was initially adopted in 2003.

Lawyers say the rule should not apply to them because they don’t engage in the kind of commercial transactions the law seeks to address.

“This rule is an unwarranted burden,” said Allen A. Etish, president of the state bar. "It is not likely to stem identity theft; however, it could very well damage the relationship attorneys have with their clients."

The state bar association’s action joins that of the American Bar Association, and state bars in New York, Arkansas, Colorado, Illinois, Ohio and Virginia.